After legislative and court fights, Washington State's capital gains tax took effect on Jan. 1, 2022. The Evergreen State's 7 percent tax applies to the sale of stocks, bonds, and other financial assets exceeding $250,000. And its collection, with the tax's first payments due this past April, has been a boon for the state's treasury. Initial estimates predicted the capital gains tax might provide Washington State around $248 million in this fiscal year, which ends on July 1. The actual amount the state has collected as of May 9 was more than three times that: $849 million. Education boost: Washington... Read more →
Even when companies try to comply with employment tax law, things can go awry. That's why many businesses hire third-party providers to handle those filings. The key here, detailed later in this post, is to hire the correct and reputable service. A Portland area construction company operator was sentenced to federal prison last week for his role in a multiyear scheme to evade the payment of payroll and income taxes on his workers' wages. The Aloha, Oregon, businessman was one of six men indicted last December by a Portland federal grand jury on charges of conspiring to defraud the United... Read more →
The Weather Channel meteorologist Ari Sarsalari says we don't need to worry too much about the low-pressure system that's formed in the Gulf of Mexico. You can watch his full forecast by clicking the screen capture above or here. The continental United States' hurricane season starts today. It runs through Nov. 30 for tropical storms that form in the Atlantic Ocean or Gulf of Mexico. The season's first tropical disturbance, officially Invest 91L, has formed in the Gulf and right now looks like it could head toward Florida. UPDATE: That was quick. Invest 91L now is Tropical Depression 2. UPDATE,... Read more →
Getting a notice from the Internal Revenue Service is rarely welcome. But such correspondence could be a tax and financial lifesaver when it's about possible tax identity theft. Over the years, the IRS has made progress in reducing tax ID theft, largely because the tax agency scans every tax return for signs of fraud. If the automated system finds a suspicious tax return, the IRS reviews the filing and sends a letter to the taxpayer letting them know about the potential ID theft. The IRS won't process the suspicious tax return until it gets a response from the taxpayer. Here... Read more →
Photo by Eric Prouzet on Unsplash In my neighborhood, the windows of businesses large and small are plastered with "Help Wanted" signs. My suburban Austin area is not alone. In the best of times, businesses face challenges in finding the best workers for their needs. This is not the best of times when it comes to hiring. Right now, according to the U.S. Chamber of Commerce, there are 9.9 million job openings in the United States, but only 5.8 million unemployed workers. This tight job market is why it's critical that companies don't undercut their hiring efforts. Some do just... Read more →
Grandparents attending graduation ceremonies are a wonderful family tradition. Now a coming tax law change will create another meeting of education and retirement, this time affecting two tax-free savings plans. (Photo by RDNE Stock project) Many of us face a dilemma when it comes to two of the biggest reasons for saving, retirement and education. Do we split our extra income between the two? If so, evenly or with one account getting a boost? Or do we defer one for the sake of the other? The answers will depend on your personal financial and family situations, as well as your... Read more →
Members of the 3rd U.S. Infantry Regiment place flags at Arlington National Cemetery in advance of Memorial Day. Memorial Day officially is Monday, May 29. But a lot of people will be traveling back home then, so it's today that most friends and family across the United States are gathering. Many will make sure to acknowledge Memorial Day. It's the national day of remembrance of those who died in service to the United States. The graphic below from the U.S. Census Bureau, using the Department of Defense's Defense Manpower Data Center statistics, has the tally of those military service personnel... Read more →
Photo by Anastasiia Chepinska on Unsplash Among the many lessons we've learned, or not, from the COVID-19 pandemic is that we'll likely never be rid of it. And as the transition to endemic status progresses, we'll continue to deal with flare-ups like, irony alert, the one that erupted following the Centers for Disease Control (CDC) and Prevention's recent first in-person Epidemic Intelligence Service conference in four years. The same persistence seems to apply to taxes, too. As the severity of COVID-19 became clearer, most of the United States went into lockdown to help slow its spread. While that saved lives,... Read more →
Remember the 94-year-old Minnesota woman whose home was seized by country tax collectors after she stopped paying her property tax bills? Such action is commonplace, as noted in my earlier post on this topic. But in Geraldine Tyler's case, Hennepin County kept all the money it got when it sold her condo, not just the amount needed to cover her delinquent real estate taxes. Those taxes, plus penalties, interest, and other costs, came to $15,000. The Minnesota county got $40,000 for the property. Yesterday (May 25), the Supreme Court of the United States, or SCOTUS, unanimously ruled in Tyler's favor.... Read more →
Photo by Durmuş Kavcıoğlu on Unsplash Some folks are already en route to their long Memorial Day weekend destination. Millions will be flying, with AAA projecting that this holiday's nearly 3.4 million air travelers will surpass pre-pandemic numbers. But the number of holiday travelers hitting U.S. roads will dwarf all other modes of Memorial Day travel. AAA expects more than 37 million will drive 50 miles or more starting today, Thursday, May 25, through Monday, May 29. Gas prices are lower this holiday compared to last year, notes AAA, when the national average was more than $4 a gallon. When... Read more →
Photo by Liza Summer After a couple of years of COVID-19 pandemic disruptions, the 2023 tax filing season was, for the most part, pretty smooth. But that apparently didn't do the federal tax system much good, at least from a reputational standpoint. The annual Gallup poll on the U.S. economy and personal finance found that the federal income tax now is considered the worst of all taxes. It bumped local property tax from the top spot. Of course, that view might have been influenced by Gallup's timing. It asked its tax questions from April 3 to 25, right as millions... Read more →
The upcoming Memorial Day weekend is the unofficial start of summer. It's also the start of a couple of sales tax holidays in Texas and Florida. Texas energy & water tax savings: Let's start here in Texas. Beginning Saturday, May 27, and running through Monday, May 29, Lone Star State shoppers won't have to pay state and local sales taxes that usually apply to purchases of energy- and water-saving products. The tax-free qualifying appliance purchases and related items include — Energy Star-qualified air conditioners priced at $6,000 or less; refrigerators priced at $2,000 or less; ceiling fans; incandescent and fluorescent... Read more →
Two enterprising women packing up items they sold for shipping. (Photo by Kampus Production) A major contributor to the Tax Gap is unreported taxable income. The Internal Revenue Service thought it was going to be able to collect more when Congress new reporting rules were included in American Rescue Plan Act (ARPA) of 2021. ARPA dramatically reduced the income level at which third-party, e-commerce payment platforms — such as eBay, PayPal, Etsy, CashApp, and Venmo, — must issue 1099-K forms to sellers who got money through them. It was set to drop from $20,000 to $600 beginning in 2023. That... Read more →
Photo by Tima Miroshnichenko A Treasury Inspector General for Tax Administration (TIGTA) report on the early results of the 2023 filing season shows that the agency is still taking identity theft seriously. This filing season, which wrapped up (save for extensions) on April 18, was the first since the pandemic began where individual tax return processing and related activities returned for the most part to normal timelines, noted TIGTA. As of March 3, the IRS had received 54.9 million tax returns, or almost a third of the 167 million filings it expects to get this year. Of that nearly 55... Read more →
The Internal Revenue Service announced last week that during filing season 2024 it will run a pilot program in which some taxpayers will be able to file their returns directly with the tax agency for free. Such no-cost, direct filing has been the tax holy grail. There would be no private software middleman, as is now the case for Free File. All of us could just go to the IRS website and file our taxes. There would be no cost, regardless of our income or filing situation complexity. And unlike the IRS' current Free Fillable Forms, there would be computer... Read more →
Owners of electric vehicles in Texas, like this one charging in a suburban Austin office garage, will face a new registration fee starting Sept. 1, 2023. (Photo by Kay Bell) More than 10 million electric cars were sold worldwide in 2022. Sales are expected to grow by another 35 percent this year, meaning 14 million electric vehicles (EVs) will be on global roads last year, according to the International Energy Agency's (IEA) latest annual analysis. That puts electric autos' share of the overall car market at 14 percent in 2022, a 10 percent increase from just two years ago. IEA... Read more →
It's going to take more charging stations, and in more rural areas, to get more U.S. drivers to even consider buying an electric vehicle. (Photo courtesy ChargeX Consortium) I live in Austin, Texas, where traffic congestion increases daily (only partially kidding). But I grew up in West Texas, where driving an hour or longer one way to get from one small town to another was and still is not unusual. Often without any kind of way station along the long, flat roads. It's those distances that give me and those who still live in more rural areas pause when it... Read more →
Photo by Juan Ramos on Unsplash May is graduation month. It's also graduate gift giving time. Money is always tight for the new diploma recipients (and their families), regardless of whether they've completed high school or college. That's why financial gifts are always welcome. One of those graduate gifts for students looking to continue their school days is a contribution to their 529 plans. And one source of those contributions could be, for older savers, their required minimum distributions. Quick 529 overview: These savings plans, named from the Internal Revenue Code that created them, originally only covered higher education expenses.... Read more →